CITIC PE agrees carve-out of TNT's China road business
CITIC Private Equity has agreed to buy TNT Express’ China road operations for an undisclosed sum. It is one of several divestments expected from the Netherlands-based logistics provider, which is seeking to cut costs and refocus on its core European market after a takeover attempt by UPS was blocked by competition authorities.
The transaction and the subsequent settlements are subject to regulatory approvals. It is expected to close in the second half of 2013 with settlement of part of the purchase price to be cleared in 2014.
"In the past few years, Hoau has transformed itself into a leading nationwide operator in China," Bernard Bot, TNT's interim CEO, said in a statement. "The change of ownership secures the ongoing growth and development of the company. TNT Express will focus on offering the broadest range of international services to and from China."
The international operations TNT plans to retain include gateways in Beijing, Shanghai and Shenzhen, 36 depots and 3,000 staff. CITIC Private Equity will get Hoau's network of 1,500 depots covering more than 600 cities through which it offers day-definite road distribution services.
The Dutch company acquired Hoau, then a privately-owned freight and parcels delivery firm, in 2007 for $135 million. At the time, Houa's network extended to 1,100 depots and 56 hubs covering all first- and second-tier cities in China. TNT announced a EUR75 million ($96.2 million) writedown on the business last year and marked it for disposal.
TNT expects to cut 4,000 jobs over the next three years and reduce annual costs by EUR220 million by 2015.
CITIC Private Equity, which closed its debut US dollar-denominated fund at $990 million in May 2011, also recently won board approval for a $340 million management buyout of NASDAQ-listed Chinese biotechnology firm 3SBio.
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